The British pound came off vis-à-vis the U.S. dollar today as cable tested bids around the US$ 1.9950 level and was capped around the $2.0110 level. Stops were triggered below the $1.9670 level, representing the 38.2% retracement of the move from $1.9735 to $2.0115. Bank of England Monetary Policy Committee policymakers testified before the Treasury Select Committee today. BoE Governor King reported inflation is likely to spike higher in 2008 and suggested there is not a need for the central bank to aggressively reduce interest rates as Federal Reserve has done. King suggested inflation could fall below 2.0% in 2009 on weaker economic growth and said it is unrealistic to expect liquidity issues will be resolved in the short-term. Talking about sterling, MPC member Bean said risks to the pound are to the downside while King said the MPC is not indifferent to the value of the pound. MPC’s Blanchflower reiterated a gradual depreciation of the pound was part of the BoE’s February quarterly inflation report projections. Cable bids are cited around the US$ 1.9880/ 1.9605 levels. The euro moved higher vis-à-vis the British pound as the single currency tested offers around the ₤0.7875 level and was supported around the ₤0.7780 level.